DIFC's robust legal system stands out amid global trade tensions

Like many people, I’ve been keeping track of global economic developments over the past month, driven by sweeping changes to tariff policies and international trading relationships. Escalating tensions and the spectre of rising prices have dented investor confidence. Even though markets have calmed down after a period of turbulence, questions around certainty and predictability in international trade have come to the fore.

A report last month by the UN Trade and Development (UNCTAD) has cautioned that “subdued demand, trade policy shocks, financial turbulence and systemic uncertainty could drive lower growth in some parts of the world”.

As many investors and businesspeople mull over the timing of the tariffs as well as their possible long-term impact on international trade, I would argue that Dubai’s global position as a neutral, business-friendly hub has come into sharper focus.

For decades, the UAE has shown that capital flows towards predictability. The choice of legal systems we have built here is an attractive proposition for global investors and businesspeople, as it offers stability both in dispute resolution and judgment enforceability. In an uncertain world, the Dubai legal system gives certainty, and it ensures that the emirate is a trusted business hub.

It is understandable that in a world where trade rules are shifting, investors need greater assurances that their investments will not suddenly be jeopardised by legal or political shocks. Dubai’s proven legal system – encompassing Dubai Courts and the DIFC (Dubai International Financial Centre) Courts – protects against arbitrary changes, giving investors confidence in the judicial system and peace of mind in volatile times.

At a national level, the UAE continues to push against global recessionary headwinds. Despite geopolitical uncertainties, conflicts and market slowdowns, growth recorded in the country for the current year demonstrates resilience across visionary mandates outlined by the leadership. As part of the commercial fabric of Dubai as well as the UAE, the DIFC Courts is obliged to capture national priorities and to work in tandem to help realise future aspirations.

Within DIFC, we have worked hard to create a system that administers an English-language common law system – offering swift, independent justice to settle domestic and international commercial or civil disputes. We can resolve all commercial disputes, ranging from sophisticated international financial transactions to simple domestic contractual and employment disputes.

A major benefit is that our laws, aligned with global standards, including these English common law principles, make it smoother for multinational companies to operate here, knowing that the legal framework is familiar and consistent with international norms.

Going further, a transparent, well-functioning legal system with a strong rule of law provides investors and businesses confidence that contracts will be enforced fairly and efficiently. Efficient dispute resolution provides further comfort, assuring businesses from all over the world that this avenue for settling commercial disputes quickly and impartially is available, should it be needed. The arbitration or mediation options we have here offer fast, fair and cost-effective resolution of commercial disputes, further reinforcing choice across the spectrum of alternative dispute resolutions.

Judgments made in the courtroom have an impact beyond the parties involved. They support confidence in the wider economy, removing obstacles for businesses to make important investment decisions.

At their core, the laws we have in Dubai are business-friendly and regularly updated to keep up with innovations, especially in areas such as fintech, AI and blockchain. The legal system supports innovation while maintaining a stable financial environment. We also remain updated in areas such as intellectual property protection, which attracts companies in finance, tech, and research and development for those who want to ensure that their ideas and assets are legally safe.

More specifically to DIFC, Sheikh Maktoum bin Mohammed, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, and President of DIFC, has empowered the DIFC Courts to lead some of the UAE’s most progressive dispute resolution services, underpinned by smart technology implementations.

How do you establish a court that can resolve transnational disputes involving international and domestic parties across complex sectors? It has been our experience that technology can vastly assist with breaking down these perceived obstacles, with innovation as the tip of the spear. We need technology to allow parties to come together in a forum that best serves their interest in finding a solution. In other words, we need to stop making the courts a place and focus more on making it a service.

A good example is how courts have embraced remote hearings. Judges, lawyers and parties can join from anywhere in the world through secure video conferencing platforms. This is especially valuable for international disputes where participants are located in different jurisdictions. On a practical basis, this helps meet the expectations of modern international businesses, as the UAE legal system uses cutting-edge technology to offer efficiency, accessibility and transparency.

Another relevant example is how we process small claims. For instance, the Small Claims Tribunal enables lower-value disputes to be fast-tracked, with judgments and procedures published online to promote transparency.

The advantages of Dubai’s legal system also mean that the city has become a draw for legal professionals who want to work here. The city has become a sought-after location for high-calibre lawyers, judges and other legal professionals, many of whom have experience in other common law jurisdictions such as in the UK, Australia and Singapore – which adds further depth and sophistication to the legal ecosystem.

Implications for cross-border data flows, digital and data governance, and ensuring protection and security of information for the business relationships that help drive the digital economy are now being reviewed with accelerated intent.

Periods of volatility are no doubt inevitable. But in this turbulent climate, being able to offer confidence to investors that contracts are predictable and enforceable is an economic asset for Dubai and the UAE.